K.C. District Facing Big Bill

Charter Schools Owed Millions, Judge Says

Every year for the past seven years, public school officials in Kansas City, Mo., have withheld millions of dollars in state funds from the city’s charter schools. That is, until a court ruled last month that the practice is illegal.

The question now is: Will the school district have to pay all of it back?

The money at stake in the dispute totals $20 million to $40 million. Officials of the 35,000-student district contend that state officials gave them permission to withhold the money—at the rate of about $800 per student, per year—so that the district could pay off debts it incurred building schools to comply with a federal school desegregation order.

If that was the case, Cole County Circuit Judge Thomas J. Brown III said in his Sept. 13 ruling, the state board of education should have taken a formal vote on the matter. Both sides agree that it never did.

But the judge included a caveat in his ruling. Because the 11 charter schools involved in the case waited until just this year to challenge the withholdings, he said, it also might not be fair to require the district to pay them all of the money.

Resolving that issue will be the next step in the dispute, a phase of the litigation that is not expected to start until early next year. In the meantime, lawyers for the charter schools—public but largely independent institutions—are trying to determine whether the district’s pockets are deep enough to handle the back payments.

The district, on the other hand, is gearing up to make the case that the state of Missouri, rather than the district, owes the money.

“The school district had no reason to know that the state was not fulfilling its statutory obligation, and the charter schools never raised an issue on that,” said Kirsten A. Byrd, the district’s lawyer.

Ironically, it was the district that touched off the legal wrangle. The Kansas City system sued the state in May, after the Missouri Board of Fund Commissioners ruled that the district had the money to pay off its bonds without continuing to withhold money from the charter schools.

Chuck W. Hatfield, the lawyer for 11 of the 14 charter schools in the district, said his clients joined the case on the school system’s heels. Until then, he said, “I think the charters all assumed that the Kansas City, Missouri, school district was complying with the state law.”